EXHIBIT 4.2
REPRESENTATIVES' WARRANT AGREEMENT
between
TRANSEASTERN PROPERTIES, INC.
and
BT SECURITIES CORPORATION
and
CRUTTENDEN XXXX INCORPORATED
and
XXXXXX XXXXXXXXXX XXXXX INC.
DATED as of November , 1996
REPRESENTATIVES' WARRANT AGREEMENT
This REPRESENTATIVES' WARRANT AGREEMENT (this "Agreement"), dated as of
November __, 1996, is made and entered into by and between TRANSEASTERN
PROPERTIES, INC., a Florida corporation (the "Company"), BT SECURITIES
CORPORATION ("BT" ), CRUTTENDEN XXXX INCORPORATED ("Cruttenden") and XXXXXX
XXXXXXXXXX XXXXX INC. ("Janney") (collectively, BT, Cruttenden and Janney are
hereinafter referred to as the "Warrantholders").
The Company agrees to issue and sell, and the Warrantholders agree to
purchase, for the collective price of $320, receipt of which is hereby
acknowledged by the Company, warrants, as hereinafter described (the
"Warrants"), of which Cruttenden shall receive 128,000 Warrants, BT shall
receive 128,000 Warrants and Janney shall receive 64,000 Warrants, to purchase
up to an aggregate of 320,000 shares (the "Shares") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), in connection with a
public offering (the "Public Offering") by the Company and certain of its
selling shareholders (the "Selling Shareholders"), collectively of an aggregate
of 3,200,000 shares of Common Stock pursuant to an Underwriting Agreement (the
"Underwriting Agreement"), dated as of November __, 1996, between the Company
and the Warrantholders, as Representatives of the Underwriters named in the
Underwriting Agreement. The purchase and sale of the Warrants shall occur on the
Closing Date (as defined in the Underwriting Agreement) and shall be subject to
the conditions to the Underwriters' obligations to purchase shares of Common
Stock thereunder.
In consideration of the foregoing, and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholders, for value received, hereby agree
as follows:
Section 1. TRANSFERABILITY AND FORM OF WARRANTS.
1.1 REGISTRATION. The Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2 TRANSFER. The Warrants shall be transferable only on the
books of the Company maintained at its principal office in Coral Springs,
Florida, or wherever its principal office may then be located, upon delivery
thereof duly endorsed by the Warrantholder or by its duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer.
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Upon any registration of transfer, the Company shall execute and deliver new
Warrants to the person entitled thereto.
1.3 LIMITATIONS ON TRANSFER OF THE WARRANTS. Subject to the
provisions of Section 11 hereof, the Warrants shall not be sold, transferred,
assigned or hypothecated by the Warrantholder until November __, 1997, except to
(i) one or more persons, each of whom on the date of transfer is an officer of
one of the Warrantholders; (ii) a general partnership or general partnerships,
the general partners of which are one of the Warrantholders and one or more
persons, each of whom on the date of transfer is an officer of one of the
Warrantholders; (iii) a successor to one of the Warrantholders in any merger or
consolidation; (iv) a purchaser of all or substantially all of one of the
Warrantholders' assets; or (v) any person receiving the Warrants from one or
more of the persons listed in this Subsection 1.3 at such person's or persons'
death pursuant to will, trust or the laws of intestate succession. The Warrants
may be divided or combined, upon request to the Company by the Warrantholders,
into a certificate or certificates representing the right to purchase the same
aggregate number of Shares. Unless the context indicates otherwise, the term
"Warrantholders" shall include any transferee or transferees of the Warrants
pursuant to this Subsection 1.3, and the term "Warrants" shall include any and
all warrants outstanding pursuant to this Agreement, including those evidenced
by a certificate or certificates issued upon division, exchange, substitution or
transfer pursuant to this Agreement.
1.4 FORM OF WARRANTS. The text of the Warrants and of the form
of election to purchase Shares shall be substantially as set forth in Exhibit A
attached hereto. The number of Shares issuable upon exercise of the Warrants is
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company by its
President or by a Vice President and attested to by its Secretary or an
Assistant Secretary. A Warrant bearing the signature of an individual who was at
any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such office prior
to the delivery of such Warrant or did not hold such office on the date of this
Agreement.
The Warrants shall be dated as of the date of signature thereof by the
Company either upon initial issuance or upon division, exchange, substitution or
transfer.
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1.5 LEGEND ON SHARES. Each certificate for Shares initially
issued upon exercise of the Warrants shall bear the following legend, unless, at
the time of exercise, such Shares are subject to an effective registration
statement under the Securities Act of 1933, as amended (the "Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 11 OF THE AGREEMENT PURSUANT TO WHICH THEY WERE
ISSUED."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution of the securities represented thereby pursuant to an
effective registration statement under the Act) shall also bear the above legend
unless, in the opinion of counsel satisfactory to the Company, the securities
represented thereby need no longer be subject to such restrictions.
Section 2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may
be exchanged for another certificate or certificates entitling the Warrantholder
to purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitled such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, with
signatures guaranteed, the certificate evidencing the Warrant to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate as so requested.
Section 3. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Subject to the terms of this Agreement, the
Warrantholder shall have the right, at any time during the period commencing at
9:00 A.M., California time, on November __, 1997, and ending at 5:00 P.M.,
California time, on November __, 2001 (the "Termination Date"), to purchase from
the Company up to the number of fully paid and nonassessable Shares to which the
Warrantholder may at the time be entitled to purchase pursuant to this
Agreement, upon surrender to the Company, at its principal office, of the
certificate evidencing the Warrants to be exercised, together with the purchase
form on the reverse thereof duly filled in and signed, with signatures
guaranteed, and upon payment to the Company of the
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Warrant Price (as defined in and determined in accordance with the provisions of
this Section 3 and Sections 7 and 8 hereof), for the number of Shares in respect
of which such Warrants are then exercised, but in no event for less than 100
Shares (unless less than an aggregate of 100 Shares are then purchasable under
all outstanding Warrants held by a Warrantholder).
(b) Payment of the aggregate Warrant Price shall be
made in cash or by check or through the use of Appreciation Currency (as defined
below) or any combination thereof. Upon such surrender of the Warrants and
payment of such Warrant Price as aforesaid, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
Warrantholder and in such name or names as the Warrantholder may designate a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrants, together with cash, as provided in Section 9 hereof,
in respect of any fractional Share otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such securities as of the date of surrender of the Warrants and
payment of the Warrant Price, as aforesaid, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
The Warrants shall be exercisable, at the election of the Warrantholder, either
in full or from time to time in part and, in the event that a certificate
evidencing the Warrants is exercised in respect of less than all of the Shares
specified therein at any time prior to the Termination Date, a new certificate
evidencing the remaining portion of the Warrants will be issued by the Company.
(c) As used herein, "Appreciation Currency" shall
mean the consideration given by the surrender of a Warrant for such number of
shares of Common Stock as is determined by multiplying the number of Shares with
respect to which the Warrant is being exercised by a fraction, the numerator of
which shall be the Warrant Price per share of Common Stock and the denominator
of which shall be the Current Market Price (as defined in Section 9 hereof) per
share of Common Stock. For purposes of determining Appreciation Currency, the
Warrant Price shall mean the Warrant Price defined in Section 7 hereof as
adjusted and readjusted as set forth in Section 8 hereof.
Section 4. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of the Warrants or the
Shares; provided, however, that the Company shall not be required to pay any tax
which may be payable in respect of any secondary transfer of the Warrants or the
Shares.
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Section 5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount to the Company at the applicant's cost.
Applicants for such substitute Warrant certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
Section 6. RESERVATION OF SHARES. There has been reserved, and the
Company shall at all times keep reserved so long as the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of Common
Stock as shall be subject to purchase under the Warrants. Every transfer agent
for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants will be irrevocably authorized and directed at all
times to reserve such number of authorized shares and other securities as shall
be requisite for such purpose. The Company will keep a copy of this Agreement on
file with every transfer agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Warrants. The Company will supply
every such transfer agent with duly executed stock and other certificates, as
appropriate, for such purpose and will provide or otherwise make available any
cash which may be payable as provided in Section 9 hereof.
Section 7. WARRANT PRICE. The price per Share at which Shares shall be
purchasable upon the exercise of the Warrants (the "Warrant Price") shall be
$______ [insert 120% of initial public offering price of common stock] subject
to further adjustment pursuant to Section 8 hereof.
Section 8. ADJUSTMENT OF NUMBER OF SHARES. The number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant Price
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:
8.1 ADJUSTMENTS. In case the Company shall (i) pay a
dividend in Common Stock or make a distribution in Common Stock, (ii) subdivide
its outstanding Common Stock, (iii) combine its outstanding Common Stock into a
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smaller number of shares of Common Stock, (iv) effect any increase or decrease
in the number of outstanding shares of Common Stock without receipt of
consideration by the Company, or (v) issue by reclassification of its Common
Stock other securities of the Company, the Warrant Price and the number of
Shares purchasable upon exercise of the Warrants immediately prior thereto shall
be proportionally adjusted so that the Warrantholder shall be entitled to
receive the kind and number of Shares or other securities of the Company which
it would have owned or would have been entitled to receive immediately after the
happening of any of the events described above, had the Warrants been exercised
at the Warrant Price immediately prior to the happening of such event or any
record date with respect thereto. Any adjustment made pursuant to this
Subsection 8.1 shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
Except for purposes of this Subsection 8.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting solely
of changes in par value or from par value to no par value or from no par value
to par value.
8.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
Subsection 8.1, no adjustment in respect of any dividends or distributions out
of earnings shall be made during the term of the Warrants or upon exercise of
the Warrants.
8.3 CERTIFICATE OF ADJUSTMENTS. Whenever the Warrant Price
and/or the number of Shares purchasable upon the exercise of the Warrants is
adjusted as herein provided, the Company shall cause to be promptly mailed to
the Warrantholder by first class mail, postage prepaid, notice of such
adjustment and a certificate of the chief financial officer of the Company
setting forth the Warrant Price and the number of Shares purchasable upon the
exercise of the Warrants after such adjustment, a brief statement of the facts
requiring such adjustment and the computation by which such adjustment was made.
8.4 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement
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that the Warrantholder shall have the right thereafter upon payment of the
Warrant Price in effect immediately prior to such action to purchase, upon
exercise of the Warrants, the kind and amount of shares and other securities and
property which it would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had the Warrants
been exercised immediately prior to such action. In the event of a merger
described in Section 368(a)(2)(E) of the Internal Revenue Code of 1986, in which
the Company is the surviving corporation, the right to purchase Shares under the
Warrants shall terminate on the date of such merger and thereupon the Warrants
shall become null and void, but only if the controlling corporation shall agree
to substitute for the Warrants its warrant which entitles the holder hereof to
purchase upon its exercise the kind and amount of shares and other securities
and property which it would have owned or been entitled to receive had the
Warrants been exercised immediately prior to such merger. Any such agreements
referred to in this Subsection 8.4 shall provide for adjustments that are
equivalent, to the extent practicable, to the adjustments provided for in
Section 8 hereof. The provisions of this Subsection 8.4 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
8.5 PAR VALUE OF SHARES OF COMMON STOCK. Before taking any
action which would cause an adjustment effectively reducing the Warrant Price
per Share below the then par value per share of the Common Stock issuable upon
exercise of the Warrants, the Company will take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Common Stock upon
exercise of the Warrants.
8.6 INDEPENDENT PUBLIC ACCOUNTANT. The Company may retain a
firm of independent public accountants of recognized national standing (which
may be any such firm regularly employed by the Company) to make any computation
required under this Section 8, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 8.
8.7 STATEMENT ON WARRANT CERTIFICATES. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance
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thereof, and any Warrant certificate thereafter issued, whether upon
registration or transfer of, or in exchange or substitution for, an outstanding
Warrant certificate, may be in the form so changed.
Section 9. FRACTIONAL INTERESTS; CURRENT MARKET PRICE. The Company
shall not be required to issue fractional Shares on the exercise of the
Warrants. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of the Warrants (or specified portion
thereof), the Company shall, in lieu of issuing such fraction of a Share, pay an
amount in cash equal to the then Current Market Price multiplied by such
fraction. For purposes of this Agreement, the term "Current Market Price" shall
mean (i) if the Common Stock is traded in the over-the-counter market and not in
the NASDAQ National Market System nor on any national securities exchange, the
average of the per share closing bid prices of the Common Stock on the 30
consecutive trading days immediately preceding the date in question, as reported
by NASDAQ or an equivalent generally accepted reporting service, or (ii) if the
Common Stock is traded in the NASDAQ National Market System or on a national
securities exchange, the average for the 30 consecutive trading days immediately
preceding the date in question of the daily per share closing prices of the
Common Stock in the NASDAQ National Market System or on the national securities
exchange on which it is listed, as the case may be. For purposes of clause (i)
above, if trading in the Common Stock is not reported by NASDAQ, the bid price
referred to in said clause shall be the lowest bid price as reported in the
"pink sheets" published by the National Quotation Bureau, Incorporated. The
closing price referred to in clause (ii) above shall be the last reported sale
price or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices, in either case in the NASDAQ National
Market System or on the national securities exchange on which the Common Stock
is then listed.
Section 10. NO RIGHTS AS SHAREHOLDER; NOTICES TO WARRANTHOLDER. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder as such or its transferees any rights as a shareholder of
the Company, including the right to vote, receive dividends, consent or receive
notices as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, (a)
any action shall occur which would require an adjustment pursuant to Section
8.1, or (b) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation, merger or sale of its property, assets and
business as an entirety or substantially as an entirety) shall be proposed, then
the Company shall give notice
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in writing of such event to the Warrantholder, as provided in Section 14 hereof,
at least 20 days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the shareholders entitled to any
relevant dividend, distribution, subscription rights or other rights or for the
determination of shareholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. Failure to mail or
receive such notice or any defect therein shall not affect the validity of any
action taken with respect thereto.
Section 11. RESTRICTION ON TRANSFER; REGISTRATION RIGHTS.
(a) The Warrantholders agree that prior to making any
disposition of the Warrants or the Shares, other than to persons or entities
identified in clauses (i) through (v), inclusive, of Section 1.3 hereof, the
Warrantholders shall give written notice to the Company describing briefly the
manner in which any such proposed disposition is to be made; and no such
disposition shall be made if the Company has notified the Warrantholder that in
the opinion of counsel reasonably satisfactory to the Warrantholder a
registration statement or other notification or post-effective amendment thereto
(hereinafter, collectively, a "Registration Statement") under the Act is
required with respect to such disposition and no such Registration Statement has
been filed by the Company, and declared effective, if necessary, by, the
Securities and Exchange Commission (the "Commission").
(b) The Company shall be obligated to the owners of
the Warrants and the Shares to file a Registration Statement as follows:
(i) Whenever during the five-year period
beginning on November __, 1996, and ending on November __, 2001, the Company
proposes to file with the Commission a Registration Statement (other than as to
securities issued pursuant to an employee benefit plan or as to a transaction
subject to Rule 145 promulgated under the Act or with respect to which a Form
S-4 Registration Statement could be used), it shall, at least 30 days prior to
each such filing, give written notice of such proposed filing to the
Warrantholder and each holder of Shares at their respective addresses as they
appear on the records of the Company, and shall offer to include and shall
include in such filing any proposed disposition of the Shares upon receipt by
the Company, not less than 10 days prior to the proposed filing date, of a
request therefor setting forth the facts with respect to such proposed
disposition and all other information with respect to such person reasonably
necessary to be included in such Registration Statement. In the event that the
managing underwriter for said offering advises the Company in writing that the
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inclusion of such securities in the offering would be materially detrimental to
the offering, such securities shall nevertheless be included in the Registration
Statement, provided that the Warrantholder and each holder of Warrants and
Shares desiring to have their Shares included in the Registration Statement
agree in writing, for a period of 90 days following such offering, not to sell
or otherwise dispose of such Shares pursuant to such Registration Statement,
which Registration Statement the Company shall keep effective for a period of at
least nine months following the expiration of such 90-day period.
(ii) In addition to any Registration
Statement pursuant to subparagraph (i) above, during the four-year period
beginning on November __, 1997 and ending on November __, 2001, the Company
will, as promptly as practicable (but in any event within 60 days), after
written request (the "Request") by either of the Warrantholders, or by a person
or persons holding (or having the right to acquire by virtue of holding the
Warrants) at least 50% of the shares of Common Stock which have been (or may be)
issued upon exercise of the Warrants, prepare and file at its own expense a
Registration Statement with the Commission and appropriate "blue sky"
authorities sufficient to permit the public offering of the Shares and will use
its best efforts at its own expense through its officers, directors, auditors
and counsel, in all matters necessary or advisable, to cause such Registration
Statement to become effective as promptly as practicable and to maintain such
effectiveness so as to permit resale of the Shares covered by the Request until
the earlier of the time that all such Shares have been sold or the expiration of
90 days from the effective date of the Registration Statement, provided,
however, that the Company shall only be obligated to file one such Registration
Statement under this Section 11(b)(ii).
(c) All fees, disbursements and out-of-pocket
expenses (other than Warrantholders' brokerage fees and commissions and legal
fees of counsel to the Warrantholders, if any) in connection with the filing of
any Registration Statement under Section 11(b) (or obtaining the opinion of
counsel and any no-action position of the Commission with respect to sales under
Rule 144) and in complying with applicable securities and blue sky laws shall be
borne by the Company. The Company at its expense will supply any Warrantholder
and any holder of Shares with copies of such Registration Statement and the
prospectus included therein and other related documents and any opinions and
no-action letters in such quantities as may be reasonably requested by the
Warrantholders or holders of Shares.
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(d) The Company shall not be required by this Section
11 to file such Registration Statement if, in the opinion of counsel for the
Warrantholders and holders of Shares and the Company (or, should they not agree,
in the opinion of another counsel experienced in securities law matters
acceptable to counsel for such holders and the Company), the proposed public
offering or other transfer as to which such Registration Statement is requested
is exempt from applicable federal and state securities laws and would result in
all purchasers or transferees obtaining securities which (i) are not "restricted
securities" as defined in Rule 144 under the Act and (ii) could thereafter be
sold publicly without limitation under Rule 144 under the Act.
(e) The Company agrees that until all Shares have
been sold under a Registration Statement or pursuant to Rule 144 under the Act,
it will keep current in filing all materials required to be filed with the
Commission in order to permit the holders of such securities to sell the same
under Rule 144.
Section 12. INDEMNIFICATION.
(a) In the event of the filing of any Registration
Statement with respect to the Shares pursuant to Section 11 hereof, the Company
agrees to indemnify and hold harmless the Warrantholders or any holder of such
Shares and each person, if any, who controls the Warrantholders or any holder of
such Shares within the meaning of the Act, against any losses, claims, damages
or liabilities, joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees), to which the Warrantholder or any holder
of such Shares or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, or amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Warrantholder or the holder
of such Shares specifically for use
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in the preparation thereof. This indemnity will be in addition to any liability
which the Company may otherwise have.
(b) The Warrantholders and the holders of the Shares
agree that they will indemnify and hold harmless the Company, each other person
referred to in subparts (1), (2) and (3) of Section 11(a) of the Act in respect
of the Registration Statement and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement, include but not be
limited to, all costs of defense and investigation and all attorneys' fees) to
which the Company or any such director, officer or controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or any related preliminary prospectus, final
prospectus or amendment or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such Registration
Statement, preliminary prospectus, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by the Warrantholder or such holder of Shares specifically for
use in the preparation thereof. This indemnity will be in addition to any
liability which the Warrantholder or such holder of Shares may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 12 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 12, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than as to the particular item as to which
indemnification is then being sought solely pursuant to this Section 12. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, reasonably assume the defense
thereof, subject to the provisions herein stated, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 12 for any legal or other expenses subsequently
incurred by such indemnified party
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in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the defense of the
action with counsel reasonably satisfactory to the indemnified party; provided
that if the indemnified party is a Warrantholder or a holder of Shares or a
person who controls a Warrantholder or a holder of Shares within the meaning of
the Act, the fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party or (ii) the named parties to any
such action, including any impleaded parties, include both a Warrantholder or a
holder of Shares or such controlling person and the indemnifying party, and a
Warrantholder or a holder of Shares or such controlling person shall have been
advised by such counsel that there may be one or more legal defenses available
to a Warrantholder or a holder of Shares or controlling person which are not
available to or in conflict with any legal defenses which may be available to
the indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of a Warrantholder or a
holder of Shares or such controlling person, it being understood, however, that
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Warrantholders, the holders of the Shares and controlling persons, which firm
shall be designated in writing by a majority in interest of such holders and
controlling persons based upon the value of the securities included in the
Registration Statement). No settlement of any action against an indemnified
party shall be made without the consent of the indemnified and the indemnifying
parties, which shall not be unreasonably withheld in light of all factors of
importance to such parties.
Section 13. CONTRIBUTION. In order to provide for just and equitable
contribution under the Act in any case in which (i) a Warrantholder or a holder
of the Shares or controlling person makes a claim for indemnification pursuant
to Section 12 hereof but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of Section 12 hereof provide for indemnification in such
case or (ii) contribution under the Act may be required on the part of any
Warrantholder or any holder of the Shares or controlling
13
person, then the Company and any Warrantholder or any such holder of the Shares
or controlling person shall contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (which shall, for all purposes of
this Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees), in either such case (after contribution
from others) on the basis of relative fault as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or a
Warrantholder or a holder of Shares or controlling person, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and such holders or
such controlling persons agree that it would not be just and equitable if
contribution pursuant to this Section 13 were determined by pro rata allocation
or by any other method which does not take account of the equitable
considerations referred to in this Section 13. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 13 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Section 14. NOTICES. Any notice pursuant to this Agreement by the
Company or by a Warrantholder or a holder of Shares shall be in writing, and
shall be deemed to have been duly given if delivered or mailed by certified
mail, return receipt requested, as applicable:
(a) If to a Warrantholder or a holder of Shares
addressed to BT Securities Corporation, Equity Capital Markets, 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; to Cruttenden Xxxx Incorporated,
00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attention: Corporate
Finance Department; or to Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as applicable.
(b) If to the Company addressed to it at Transeastern
Properties, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx
00000, Attention: President.
14
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
Section 15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrantholders or the
holders of Shares shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 16. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will
not merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the provisions
of Section 8.4 hereof are complied with.
Section 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any schedule, exhibit, certificate or other instrument delivered by
or on behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
Section 18. APPLICABLE LAW. This Agreement shall be deemed to be a
contract made under the laws of the State of California and for all purposes
shall be construed in accordance with the laws of said State.
Section 19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrantholders and the holders of Shares any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Warrantholders and the holders of Shares.
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
TRANSEASTERN PROPERTIES, INC.
By: ________________________________
Title: President
BT SECURITIES CORPORATION
By: ________________________________
Title:
CUTTENDEN XXXX INCORPORATED
By: ________________________________
Title:
XXXXXX XXXXXXXXXX XXXXX INC.
By: ________________________________
Title
16
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED,
HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN COMPLIANCE WITH
SECTION 11 OF THE AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
Warrant Certificate No. ___
REPRESENTATIVES' WARRANTS TO PURCHASE ________ SHARES OF COMMON STOCK
VOID AFTER 5:00 P.M.,
CALIFORNIA TIME, ON NOVEMBER __, 2001
--------------------------
This certifies that, for value received, ___________________, the
registered holder hereof or assigns (the "Warrantholder"), is entitled to
purchase from Transeastern Properties, Inc. (the "Company"), at any time during
the period commencing at 9:00 A.M., California Time, on November __, 1997, and
before 5:00 P.M., California time, on November __, 2001, at the purchase price
per share of $____ (the "Warrant Price"), the number of shares of Common Stock
of the Company set forth above (the "Shares"). The number of Shares issuable
upon exercise of each Warrant evidenced hereby shall be subject to adjustment
from time to time as set forth in the Representatives' Warrant Agreement
referred to below.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form attached hereto
duly executed (with a signature guarantee as provided thereon) and simultaneous
payment of the Warrant Price at the principal office of the Company. Payment of
such price shall be made at the option of the Warrantholder in cash or by check
or through the use of Appreciation Currency (as defined in Section 3(c) of the
Representatives' Warrant Agreement).
The Warrants evidenced hereby represent the right to purchase an
aggregate of up to _______ Shares and are issued under and in accordance with a
Representative's Warrant Agreement, dated as of November __, 1996 (the
"Representatives' Warrant Agreement"), between the Company, BT Securities
Corporation and Cruttenden Xxxx Incorporated and are subject to the terms and
provisions contained in the Representatives' Warrant Agreement, to all of which
the Warrantholder by acceptance hereof consents.
Upon any partial exercise of the Warrants evidenced hereby, there shall
be signed and issued to the Warrantholder a new Warrant Certificate in respect
of the Shares of Common Stock as to which the Warrants evidenced hereby shall
not have been exercised. These Warrants may be exchanged at the office of the
Company by surrender of this Warrant Certificate properly endorsed for one or
more new Warrants of the same aggregate number of Shares of Common Stock as are
evidenced by the Warrant or Warrants exchanged. No fractional Share of Common
Stock will be issued upon the exercise of rights to purchase hereunder, but the
Company shall pay the cash value of any fraction upon the exercise of one or
more Warrants. These Warrants are transferable at the office of the Company in
the manner and subject to the limitations set forth in the Representatives'
Warrant Agreement.
This Warrant Certificate does not entitle any Warrantholder to any of
the rights of a shareholder of the Company.
TRANSEASTERN PROPERTIES, INC.
By: ______________________________________
Title: President
Dated: November __, 1996
ATTEST: [Seal]
17
---------------------
PURCHASE FORM
---------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant Certificate for,
and to purchase thereunder, ________ shares of Common Stock (the
"Shares") provided for therein, and requests that certificates for the
Shares be issued in the name of:
------------------------------------------------------------------
(Please Print or Type Name, Address and Social Security Number)
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
and, if said number of shares shall not be all the Shares purchasable
hereunder, that a new Warrant Certificate for the balance of the Shares
purchasable under the within Warrant Certificate be registered in the
name of the undersigned Warrantholder or his Assignee as below
indicated and delivered to the address stated below.
Dated: ______________________
Name of Warrantholder or Assignee: ____________________________________
(Please Print)
Address: ____________________________________________________________
____________________________________________________________
Signature: ____________________________________________________________
Note: The above signature must correspond with the name as written
upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever,
unless these Warrants have been assigned.
Signature Guaranteed: ____________________________________________
(Signature must be guaranteed by a bank or trust company having an
office or correspondent in the United States or by a member firm of a
registered securities exchange or the National Association of
Securities Dealers, Inc.)
ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(Name and Address of Assignee Must Be Printed or Typewritten)
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
the within Warrants hereby irrevocably constituting and appointing
_____________________ Attorney to transfer said Warrants on the books
of the Company, with full power of substitution in the premises.
Dated: __________________ ____________________________________
Signature of Registered Holder
Note: The signature on this assignment must correspond with the name as
it appears upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signature Guaranteed: __________________________________
(Signatures must be guaranteed by a bank or trust company having an
office or correspondent in the United States or by a member firm of a
registered securities exchange or the National Association of
Securities Dealers, Inc.)
18
